The form that discloses to SBA any fee paid to an agent such as a packager or broker, and a lender fee above $2,500, with the compensation agreement behind it.
On a 7(a) loan a lender completes Form 159 for its own fees above $2,500 and for any agent. On a 504 project it is signed by the borrower, the development company and the agent. Fees paid under a professional services contract that SBA must authorize for a development company are handled in that contract and are not put on the form. Out-of-pocket costs such as an appraisal or recording fees are itemized in the file, not on the form.
The two limits differ. A lender may charge a percentage packaging fee of up to 5 percent on a loan of $150,000 or less and 3 percent above, and never more than $30,000, nor more than it charges on similar non-SBA loans. An agent may charge up to 3 percent on a loan of $50,000 or less, and 2 percent of a larger loan up to $1,000,000 plus 0.25 percent above, also capped at $30,000. An agent may not charge a fee that depends on the loan closing.
Example on a $400,000 loan: a lender’s fee is capped at 3 percent, $12,000. An agent’s is capped at 2 percent, $8,000. A $2,000 fee needs no supporting record of the work.
How it shows up in the data here
Not in any public file. Form 159 goes to SBA and is not published, and the SBA loan file has no field for packaging or broker fees. The SBA agent entry lists the limits on agent fees.
Go further
- A bank said no: three questions: Free help to try before paying anyone.
- What to do after a bank says no to a business loan: One bank's no is one lender's answer, and the reasons are yours to ask for. They usually point to a constraint you can name.
- SBA 7(a) loan package checklist: A 7(a) package is the bank's usual file plus SBA's own list. Know which items SBA requires and you can have them ready before the first call.
- SBA 504 loan package checklist: A 504 project has three parties, two loans and a closing date set by a monthly bond sale. Build the package for all three.
Related terms
- SBA agent (packager, referral agent or broker): Anyone who represents an applicant or a lender in dealings with SBA for pay: an attorney, accountant, consultant, packager or broker. SBA does not require a borrower to use one.
- Upfront guaranty fee (SBA 7(a)): The one-time fee a 7(a) lender pays SBA for its guaranty, set by loan size and charged on the guaranteed portion. The lender may pass it on to the borrower.
- Annual service fee (SBA lender's fee): A yearly fee a 7(a) lender pays SBA on the outstanding balance of the guaranteed portion of each loan. On a 7(a) loan the lender may not pass it on to the borrower.
- SBA 7(a) loan: SBA's main business loan program. A lender makes the loan and SBA guarantees part of it: up to 85 percent of $150,000 or less and 75 percent of more, on loans up to $5,000,000.
Sources
Plain definitions for orientation, not legal, tax or credit advice. A lender's own policy decides what it will do.